China Puts Tariffs On Soybeans And Airplanes In Rebuff To Trump

China appeared ready to match President Trump dollar for dollar on import tariffs on Wednesday, hitting imports of soybeans, airplanes and other goods totaling $50 billion with a 25% duty.

The Chinese ministry of commerce announced the new taxes and said they were “in order to safeguard China’s legitimate rights and interests,” but it said the date when the tariffs would start had not been set – leaving open the possibility that it will negotiate with Washington to avoid a trade war.

The Chinese move was a remarkably quick response to the Trump administration’s publication 12 hours earlier of a list of 1,300 Chinese goods worth $50 billion that will be subject to new import tariffs. The administration said China’s policies on technology transfer and intellectual property are “unreasonable or discriminatory and burden or restrict U.S. commerce.”

The list includes antibiotics, airplane parts and small cars. The U.S. has repeatedly complained that Chinese cars are being imported into the U.S. with only a 2% duty, while U.S.-made cars face a 25% duty in China.

Trump kept up his attacks on Wednesday, saying on Twitter: “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!”

The Chinese decided against a long list of products to tax, instead choosing such key items as soybeans and airplanes. China imported $14 billion worth of U.S. soybeans last year as well as an equal amount of aircraft. Selecting items like soybeans seems to target Republican-dominated areas of the U.S. in an effort to force Trump to back down, while naming Telsa autos was a rebuke to Tesla CEO Elon Musk, who called on Trump for action against China.

Despite the increase in rhetoric on both sides, Commerce Secretary Wilbur Ross said the trade conflict was likely to be settled in a negotiated deal.

"It wouldn't be surprising at all if the net outcome of all this is some sort of a negotiation," Ross said on CNBC. "It's very difficult to put a specific time denomination on negotiations that are as complex as these."